It’s a difficult task balancing spending on what you need, what you desire and saving for the future. Usually our paycheck falls through our hands as soon as we get it.
Many of us will experience a financial crisis at some point in our lives. This can happen if your savings drop below a sufficient level to handle a disaster, you lose your job, or illness prevents you from earning your full wage. Read on to find ways to help you ensure you do not face a financial crisis in your near future.
Maximise your liquid assets
Cash in hand, in current accounts and accessible saving accounts all are beneficial, as they don’t fluctuate with market movements. The cash is also at your disposal at any time, without any financial loss (e.g. losing a strong interest rate in an ISA).
Keep a record
One of the main reasons that a person enters a financial crisis is that they don’t save enough of what they earn. If you keep a record of not only your earnings, but your outgoings as well, it will give you a much better overview to discover if you are overspending.
Stick to a monthly budget
Prepare a monthly budget after evaluating the previous months incomings and outgoings. A well-organised budget can include expenses for all necessities including food, petrol, bills and rent, but don’t forget to factor in money you will spend in your leisure time; otherwise it could be a very dull month. When you have created a budget to live within your means, stick to it.
Maintain your possessions
Maintaining your possessions is a good way to keep your money situation in check. Keeping everything in good working condition, from your car to your household appliances, costs much less than replacing them every time they break.
Watch this space for part two of this article arriving in the coming weeks.